Why did the computer go to therapy?
It had too many bytes of emotional baggage.
Why did the billboard get a promotion?
It was outstanding in its field!
Why are advertisers such great dancers?
Because they always have the right moves to impress their target audience.
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Hawk Digital specializes in elevating brand visibility and engagement through cutting-edge digital media services. Our expertise spans Online, Mobile, and Connected TV (CTV) advertising, along with video production and strategic content creation. By leveraging the latest technologies, industry standards, and retail media strategies, we craft targeted advertising campaigns that deliver measurable results. Hawk is dedicated to helping brands and agencies maximize their reach and achieve successful attribution for their marketing objectives.
The retail media landscape is rapidly evolving, with Amazon and Walmart dominating the market. By 2025, these two powerhouses are projected to control over 84% of retail media ad spending, leaving only a marginal share for other Retail Media Networks (RMNs). Despite the influx of new RMNs, their combined share of ad spending has barely increased, rising by less than 1 percentage point between 2019 and 2024. While the total ad spending pie has expanded nearly fivefold since 2019, the market has become far more crowded, with smaller players vying for a limited portion of advertisers’ budgets.
Growth of Retail Media and the Power of Amazon and Walmart
Amazon and Walmart’s overwhelming dominance is attributed to their expansive digital ecosystems, robust first-party data, and ability to offer unparalleled scale to advertisers. These advantages make them indispensable for brands looking to optimize their retail media strategies. Advertisers prioritize these platforms for their proven track record of driving measurable outcomes, leaving smaller RMNs struggling to compete.
From 2019 to 2024, the growth of RMNs beyond the top players has been negligible, highlighting a lack of disruption within the market. Even with the addition of new entrants, smaller retailers are unable to match the capabilities of Amazon and Walmart. This trend is expected to continue into 2025, further solidifying the duopoly.
Challenges for Smaller RMNs
While smaller RMNs aim to carve out a niche, several barriers prevent them from gaining traction. Many midsize and smaller retailers lack the digital scale to generate significant revenue by monetizing their own channels. This leaves them reliant on off-site strategies or in-store advertising, both of which require substantial investments in expertise, technology, and infrastructure. For many, these investments are either unattainable or do not deliver adequate returns.
Adding to these challenges is the slow progress in standardization and transparency within the retail media space. Despite trade associations providing guidelines, not all retailers are motivated to implement them. This hesitancy further entrenches Amazon and Walmart’s leadership, as advertisers gravitate toward platforms that offer clear, measurable results.
The situation is compounded by a slowdown in digital advertising growth within the consumer packaged goods (CPG) sector. Digital ad spending by CPG brands is forecasted to grow by only 6.1% in 2025, a sharp decline from the double-digit growth seen in 2023 and 2024. This deceleration will disproportionately impact smaller RMNs that depend on CPG advertisers, further limiting their ability to compete with industry leaders.
Strategies for Survival
To stay competitive, smaller RMNs are branching into off-site digital channels and exploring partnerships that enable scaled reach. By tapping into budgets traditionally reserved for upper-funnel awareness campaigns, these networks hope to capture a larger share of ad dollars. However, succeeding in these areas requires significant upfront investment in capabilities, which many resource-constrained retailers find difficult to achieve.
Ad tech platforms present a potential lifeline for smaller and midsize retailers. By offering turnkey solutions, these platforms can help RMNs manage their advertising efforts without the need for costly in-house operations. As a result, some smaller retailers may opt to outsource their RMN capabilities entirely, reducing their operational burden while maintaining a presence in the market.
Predictions for 2025 and Beyond
Looking ahead, several trends are expected to shape the retail media landscape:
- Consolidation Among Advertisers: Resource-strapped advertisers will streamline their retail media spending by focusing on fewer networks. This consolidation will disproportionately benefit Amazon and Walmart, further widening the gap between them and smaller RMNs.
- Ad Tech Partnerships: Ad tech platforms will play an increasingly prominent role as small and midsize retailers turn to third-party providers for support. These partnerships will enable retailers to remain competitive without the need for costly in-house infrastructure.
- Decline of Non-Competitive RMNs: Retailers that fail to make decisive investments in technology, expertise, and scalability will face harsh realities. Some will abandon their RMN ambitions entirely, while others may outsource basic capabilities to remain in the game.
- Shift Toward Off-Site Advertising: Smaller RMNs will focus more on off-site advertising to capture additional ad budgets. While this strategy holds potential, it requires significant investment in expertise and technology, creating a challenging path forward.
Implications for the Industry
The growing dominance of Amazon and Walmart underscores the challenges faced by smaller RMNs. Their ability to deliver results at scale makes them the go-to platforms for advertisers, leaving little room for competitors to thrive. However, this dominance also raises questions about market diversity and innovation. As smaller players struggle to compete, the industry risks becoming increasingly centralized around a few key players.
For advertisers, this trend highlights the importance of strategic planning. While investing in Amazon and Walmart is a near-necessity, exploring opportunities with smaller RMNs—particularly those leveraging off-site channels—could yield unique benefits. Similarly, ad tech platforms will play a crucial role in enabling smaller retailers to stay competitive, offering a bridge between limited resources and the demands of modern retail media.
